SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB/A Annual Report
Amendment No. 1
Under Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the Fiscal Year Ended: December 31, 1999
Commission File No. 0-27943
Promos, Inc.
---------------------------------------------------------------
(Exact Name of Small Business Issuer as specified in its charter)
Colorado 84-1209909
--------------- ------------------------
(State or other (IRS Employer File Number)
jurisdiction of
incorporation)
6000 E. Evans, Suite 2-020
Denver, Colorado 80222
-------------------------------------------------------------------
(Address of principal executive offices) (zip code)
(303) 758-3537
--------------------------------------------------
(Registrant's telephone number, including area code)
Securities to be Registered Pursuant to Section 12(b) of the Act: None
Securities to be Registered Pursuant to Section 12(g) of the Act:
Common Stock, $.0.001 per share par value
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes: [X] No: [ ]
Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B is contained in this form and no disclosure will be
contained, to the best of Registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-
KSB. [ ]
State issuer's revenues for its most recent fiscal year $129,660. The
aggregate market value of the voting stock of the Registrant held by
non-affiliates as of December 31, 1999 was not able to be determined since the
Registrant's stock has not ever traded. The number of shares outstanding of the
Registrant's common stock, as of the latest practicable date, March 1, 2000, was
10,033,600.
<PAGE>
References in this document to "us," "we," or "the Company" refer to
Promos, Inc.
PART I
(a) General Development of Business
We are a Colorado corporation. Our principal business address is 6000 E.
Evans, Suite 2- 020, Denver, Colorado 80222.
We were incorporated under the laws of the State of Colorado on September
24, 1992. We are a full service, innovative brand marketing organization whose
activities are centered around our client's products.
On August 30, 1999, our shareholders approved an 8,000-for-one forward
split of the Common Stock. As of the date of this Registration Statement, we
have 10,033,600 shares of Common Stock issued and outstanding.
The Company has not been subject to any bankruptcy, receivership or similar
proceeding.
(b) Narrative Description of the Business
General
We have had operations since inception. No independent market surveys have
ever been conducted to determine demand for our products and services. During
this period, we have had operations and generated revenues. We also have had
minimal profit from time to time, although we were unprofitable last fiscal
year. Our fiscal year end is December 31st.
Organization
We are comprised of one corporation with no subsidiaries or parent
entities.
We are filing this Form 10-SB on a voluntary basis because we plan to
engage in equity and/or debt financing in the foreseeable future and believe
that our fund raising will be enhanced by having a record of regular disclosure
under the Securities Exchange Act of 1934 (the "1934 Act"). We have no plans in
the foreseeable future, under any circumstances, to terminate our registration
under the 1934 Act.
2
<PAGE>
(c) Operations
Since inception, we have been a full service, innovative brand marketing
organization whose activities are centered around our client's products. Brand
marketing builds the value of the brand by connecting it with target audiences
to achieve strategic marketing objectives.
Our efforts are organized into four operating segments, composed of
promotional products and marketing services. The marketing services segment
includes promotion marketing, brand strategy and identity, presence marketing
and consumer event marketing. Each one of the segments has similar products and
services, production processes, types of clients, distribution methods and
regulatory environments. We attempt to physically connect the brand with
identified target markets and individuals through repeated exposure to
merchandise that builds brand awareness, enhances brand recognition and creates
brand loyalty.
PROMOTION MARKETING. This segment connects the brand with the consumer at
strategic points of contact through consumer and retail promotion, merchandising
and sponsorship activation.
BRAND STRATEGY AND IDENTITY. This segment connects a company product,
service or image with a target audience by creating, revitalizing, or leveraging
a brand through brand identity, design, and integrated communication programs.
PRESENCE MARKETING. This segment connects the brand with the target
audience through sports and corporate sponsorships, licensing, corporate
meetings, events and sales incentive programs.
RELATIONSHIP MARKETING. This segment connects the brand with the target
audience through consumer events--including a new product sampling and brand
awareness programs.
We plan to continue to generate revenues in each of these segments and to
focus on expanding our client base as a method of developing our business.
Our larger clients include: First Trust, Incorporated, a subsidiary of
Fiserv, Inc.; KMGH-TV, Channel 7, the ABC affiliate in Denver; Distinctive
Properties, a real estate broker in the Denver Metropolitan area; ReMax, a
worldwide real estate franchising company; Hallmark Entertainment; and the
National Potato Promotion Board.
In addition we plan to expand through acquisition. We will not only look at
our present industry but will reserve the right to investigate and, if
warranted, merge with or acquire the assets or common stock of an entity
actively engaged in business which generates revenues. We will seek
opportunities for long-term growth potential as opposed to short-term earnings.
As of the date hereof, we have no business opportunities under investigation.
None of our officers, directors, promoters or affiliates have engaged in any
preliminary contact or discussions with any representative of any other company
regarding the possibility of an acquisition or merger between us and such other
company.
3
<PAGE>
We have one full-time employee, our President, who receives a salary. Our
Secretary-Treasurer has agreed to allocate a portion of his time to our
activities, without compensation. These officers anticipate that our business
plan can be implemented by their collectively devoting approximately sixty hours
per month to our business affairs, consequently, conflicts of interest may arise
with respect to the limited time commitment of such officers. These officers
will use their best judgements to resolve all such conflicts.
(d) Markets
Our marketing plan is focused completely on expanding our client base. We
will use the efforts of our officers and directors and will rely upon the
satisfaction of previous clients to market our services.
(e) Raw Materials
The use of raw materials is not now material factor in our operations at
the present time.
(f) Customers and Competition
At the present time, we expect to be an insignificant participant among the
firms which engage in the brand marketing industry. There are a number of
established companies, most of which are larger and better capitalized than we
are and/or have greater personnel resources and technical expertise. In view of
our combined extremely limited financial resources and limited management
availability, we believe that we will continue to be at a significant
competitive disadvantage compared to our competitors. There can be no guarantee
that we will continue to generate substantial revenues or continue to be
profitable.
(g) Backlog
At December 31, 1999, we had no backlogs.
(h) Employees
At as of the date hereof, we have one employee. We do not plan to hire
employees in the future.
(i) Proprietary Information
We own no proprietary information.
(j) Government Regulation
We are not subject to any material governmental regulation or approvals.
4
<PAGE>
(k) Research and Development
We have never spent any amount in research and development activities.
(l) Environmental Compliance
We are not subject to any costs for compliance with any environmental laws.
Item 2. Description of Properties.
Our business office is located at 6000 E. Evans, Suite 2-020, Denver,
Colorado 80222. We pay $336 per month in rent for this office space to an
unaffiliated third party under a lease which expires on February 28, 2001. We
have no properties other than office equipment and furniture.
Item 3. Legal Proceedings.
No legal proceedings of a material nature to which we are a party were
pending during the reporting period, and we know of no legal proceedings of a
material nature pending or threatened or judgments entered against any of our
directors or officers in their capacity as such.
Item 4. Submission of Matters to a Vote of Security Holders.
We did not submit any matter to a vote of security holders through
solicitation of proxies or otherwise during the fourth quarter of the fiscal
year covered by this report.
PART II
Item 5. Market for Common Equity and Related
Stockholder Matters.
(a) Principal Market or Markets
Our securities have never been listed for trading on any market and are not
quoted at the present time. We have applied to trade on the NASD
Over-the-Counter Bulletin Board. However, at the present time, we do not know
where secondary trading will eventually be conducted. The place of trading, to a
large extent, will depend upon our eventual size. To the extent, however, that
trading will be conducted in the Over-the-Counter market in the so-called "pink
sheets" or the NASD's "Electronic Bulletin Board," a shareholder may find it
more difficult to dispose of or obtain accurate quotations as to price of our
securities. In addition, The Securities Enforcement and Penny Stock Reform Act
of 1990 requires additional disclosure and documentation related to the market
for penny stock and for trades in any stock defined as a penny stock.
5
<PAGE>
(b) Approximate Number of Holders of Common Stock
As of the date hereof, a total of 10,033,600 of our common shares were
outstanding. The number of holders of record of our common stock at that date
was approximately one hundred ten. These shares reflect an 8,000-for-one forward
split of the common stock.
(c) Dividends
Holders of common stock are entitled to receive such dividends as may be
declared by our Board of Directors. No dividends on the common stock were paid
by us during the periods reported herein nor do we anticipate paying dividends
in the foreseeable future.
(d) The Securities Enforcement and Penny Stock Reform Act of 1990
The Securities Enforcement and Penny Stock Reform Act of 1990 requires
additional disclosure and documentation related to the market for penny stock
and for trades in any stock defined as a penny stock. Unless we can acquire
substantial assets and trade at over $5.00 per share on the bid, it is more
likely than not that our securities, for some period of time, would be defined
under that Act as a "penny stock." As a result, those who trade in our
securities may be required to provide additional information related to their
fitness to trade our shares. Also, there is the requirement of a broker-dealer,
prior to a transaction in a penny stock, to deliver a standardized risk
disclosure document that provides information about penny stocks and the risks
in the penny stock market. Further, a broker-dealer must provide the customer
with current bid and offer quotations for the penny stock, the compensation of
the broker-dealer and its salesperson in the transaction, and monthly account
statements showing the market value of each penny stock held in the customer's
account. These requirements present a substantial burden on any person or
brokerage firm who plans to trade our securities and would thereby make it
unlikely that any liquid trading market would ever result in our securities
while the provisions of this Act might be applicable to those securities.
(e) Blue Sky Compliance
The trading of penny stock companies may be restricted by the securities
laws ("Blue Sky" laws) of the several states. Management is aware that a number
of states currently prohibit the unrestricted trading of penny stock companies
absent the availability of exemptions, which are in the discretion of the
states' securities administrators. The effect of these states' laws would be to
limit the trading market, if any, for our shares and to make resale of shares
acquired by investors more difficult.
6
<PAGE>
Item 6. Management's Discussion and Analysis or Plan of Operation.
Forward-Looking Statements
The following discussion contains forward-looking statements regarding our
Company, its business, prospects and results of operations that are subject to
certain risks and uncertainties posed by many factors and events that could
cause our actual business, prospects and results of operations to differ
materially from those that may be anticipated by such forward-looking
statements. Factors that may affect such forward-looking statements include,
without limitation: our ability to successfully develop new products for new
markets; the impact of competition on our revenues, changes in law or regulatory
requirements that adversely affect or preclude clients from using our products
for certain applications; delays our introduction of new products or services;
and our failure to keep pace with emerging technologies.
When used in this discussion, words such as "believes", "anticipates",
"expects", "intends" and similar expressions are intended to identify
forward-looking statements, but are not the exclusive means of identifying
forward-looking statements. Readers are cautioned not to place undue reliance on
these forward-looking statements, which speak only as of the date of this
report. Our Company undertakes no obligation to revise any forward-looking
statements in order to reflect events or circumstances that may subsequently
arise. Readers are urged to carefully review and consider the various
disclosures made by us in this report and other reports filed with the
Securities and Exchange Commission that attempt to advise interested parties of
the risks and factors that may affect our business.
Results of Operations
We have generated revenues from operations since inception. We were
profitable for the twelve months ended December 31, 1999. We had revenues of
$129,660, compared to revenues of $115,441 for the same period ended December
31, 1998. Total expenses for the twelve months ended December 31, 1999 were
$46,845 compared to expenses of $44,845 for the same period ended December 31,
1998. Our operating expenses during the fiscal year ended December 31, 1999
increased slightly from the previous year. The major components of operating
expenses are office salaries and associated payroll costs, general and health
insurance costs, rent and telephone expenses.
Costs of goods include all direct costs incurred in the process of
representing clients. The difference between our gross revenues and cost of
goods is our gross profit.
Gross profit from operations was $55,507 or approximately 43% of gross
revenues for the year ended December 31, 1999, compared to $37,725 or
approximately 33% of gross revenues for the year ended December 31, 1998, an
increase by approximately 10%.
The principal difference between 1999 and 1998 was the increase of gross
revenues and a modest profit. We have replaced the projects which had terminated
so that the revenues for fiscal year 1999 exceeded those of 1998. Our operating
expenses did not increase proportionately, so we had a small profit of $6,109 in
1999 as compared to a loss of $8,376 in 1998 and expect the profitability trend
to continue for the next fiscal year.
7
<PAGE>
Liquidity and Capital Resources
Net cash increased to $21,581 for the year ended December 31, 1999,
compared to $746 for the year ended December 31, 1998.
Accounts receivable decreased slightly for the year ended December 31, 1999
to $10,641, compared to $15,741 for the year ended December 31, 1998.
Prepaid Expenses increased to $680 for the year ended December 31, 1999,
compared to $100 for the year ended December 31, 1998.
Accounts payable decreased for the year ended December 31, 1999 to $2,960,
compared to $9,986 for the year ended December 31, 1998.
We were modestly profitable in 1999 but sustained a loss in 1998. Our
operating expenses were relatively the same during both periods. Larger client
projects account for the difference between a profit and a loss. In any case, we
try to operate with minimal overhead. Our primary activity will be to seek to
expand our client base and, consequently, our revenues. If we succeed in
expanding our client base and generating sufficient revenues, we will continue
to be profitable. We cannot guarantee that this will ever occur. Our plan is to
build our Company in any manner which will be successful. To that end, we may
also look for an acquisition candidate, although we have concluded no
acquisitions and have spoken with no potential candidates.
We feel that we have inadequate working capital to pursue any business
opportunities other than seeking additional clients or an acquisition candidate.
During the next twelve months, we plan to investigate an offering of our
securities, whether through a private placement or a public offering. At the
present time, we have no firm arrangements with regard to either type of
offering. We do not intend to pay dividends in the foreseeable future.
Item 7. Financial Statements.
PROMOS, INC.
AUDIT REPORT
For the Years Ended December 31, 1999 and 1998
Janet Loss, C.P.A., P.C.
Certified Public Accountant
1777 South Harrison Street, Suite 2100
Denver, Colorado 80210
8
<PAGE>
PROMOS, INC.
INDEX TO FINANCIAL STATEMENTS
TABLE OF CONTENTS
ITEM PAGE
- ---- ----
Report of Certified Public Accountant.................................. F-2
Balance Sheets,
December 31, 1999 and 1998 ............................................ F-3, F-4
Statements of Operations, for the years
Ended December 31, 1999 and 1998 ...................................... F-5
Statements of Stockholders' Equity, for
The years ended December 31, 1999 and 1998 ............................ F-6
Statements of Cash Flows, for the years ended
December 31, 1999 and 1998 ........................................... F-7
Notes to Financial Statements ......................................... F-8, F-9
F-1
<PAGE>
Janet Loss, C.P.A., P.C.
Certified Public Accountant
1777 South Harrison Street, Suite 2100
Denver, Colorado 80210
Board of Directors
Promos, Inc.
6000 Evans Avenue, Building 2-20
Denver, Colorado 80222-5406
I have audited the accompanying Balance Sheets of Promos, Inc. as of December
31, 1999 and 1998, and the Statements of Operations, Stockholders' Equity, and
Cash Flows for the years ended December 31, 1999 and 1998.
I conducted my audit in accordance with generally accepted auditing standards.
These standards require that I plan and perform the audit to obtain reasonable
assurances about whether the financial statements are free of material
misstatements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the overall
financial statement presentations.
In my opinion, the financial statements referred to above present fairly, in all
materials respects, the financial position of Promos, Inc. as of December 31,
1999 and 1998, and the results of its operations and its cash flow for the years
ended December 31, 1999 and 1998.
/s/ Janet Loss
Janet Loss, C.P.A., P.C.
March 29, 2000
F-2
<PAGE>
<TABLE>
<CAPTION>
PROMOS, INC.
BALANCE SHEETS
For the Years Ended December 31, 1999 and 1998
ASSETS 1999 1998
------ ---- ----
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents ........................ 21,587 $ 746
Accounts receivable, net of
Allowance of for doubtful accounts
$0 and $839 ...................................... 10,641 15,741
Prepaid Expenses ................................. 680 100
------- -------
Total Current Assets ........................ 32,908 16,587
------- -------
Fixed assets at cost, net
Of accumulated depreciation
Of $1,600 and $1,280 ............................. 0 320
Security Deposit ................................. 260 260
------- -------
Total Assets ................................ $33,168 $17,167
======= =======
</TABLE>
F-3
<PAGE>
<TABLE>
<CAPTION>
PROMOS, INC.
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES: 1999 1998
- ------------------- ---- ----
<S> <C> <C>
Accounts Payable ................................................ $ 2,960 $ 9,986
Sales and Payroll Taxes Payable ................................. 1,487 1,577
Corporate Income Taxes Payable .................................. 2,194 0
Accrued Expenses ................................................ 0 3,840
Bank's Line of Credit,
Current Portion ............................................ 6,711 4,126
--------- ---------
Total Current Liabilities ....................................... 13,352 19,529
--------- ---------
LONG TERM LIABILITIES:
Stockholder's Loan .............................................. 0 4,500
--------- ---------
Total Liabilities .......................................... $ 13,352 $ 24,029
--------- ---------
STOCKHOLDERS' EQUITY:
Preferred Stock, 10,000,000 shares
Of non-voting authorized, par value
Of $0.01 per share, none issued ................................. 0 0
Common stock, par value of $.001,
per share, 50,000,000 shares authorized,
10,033,600 and 10,000,000 shares
issued and outstanding at December 31, 1999 ..................... 10,034 1,250
Additional Paid-in-Capital ...................................... 11,785 0
Retained earnings (Deficit) ..................................... (2,003) (8,112)
--------- ---------
Total Stockholders' Equity ...................................... 19,816 (6,862)
--------- ---------
Total Liabilities and
Stockholders' Equity ............................................ $ 33,168 $ 17,167
========= =========
</TABLE>
* Shares Adjusted for an 8,000 for 1 forward split of common stock. The
accompanying notes are an integral part of the financial statements.
F-4
<PAGE>
<TABLE>
<CAPTION>
PROMOS, INC.
STATEMENTS OF OPERATIONS
For the Years Ended December 31, 1999 and 1998
1999 1998
---- ----
<S> <C> <C>
REVENUES:
Sales .................................................. $ 129,660 $ 115,441
------------ ------------
COSTS OF GOODS SOLD:
Purchases and freight .................................. 74,153 77,716
------------ ------------
GROSS PROFIT ........................................ 55,507 37,725
------------ ------------
OPERATING EXPENSES:
Advertising ............................................ 970 748
Auto Expenses .......................................... 566 787
Auto Rental ............................................ 4,840 4,840
Delivery and Postage ................................... 970 1,006
Depreciation Expense ................................... 320 320
Dues and subscriptions ................................. 574 1,175
Employee Benefits ...................................... 2,557 4,266
Insurance Expense ...................................... 754 1,044
Licenses and Taxes ..................................... 2,461 1,226
Office Supplies and Expenses ........................... 3,777 2,606
Officer's Salary ....................................... 15,500 15,000
Professional fees ...................................... 699 0
Rent and Maintenance ................................... 4,217 6,209
Samples ................................................ 621 451
Telephone Expenses ..................................... 4,714 4,451
Travel and Entertainment ............................... 3,305 716
------------ ------------
Total Operating Expenses .......................... 46,845 44,845
------------ ------------
NET INCOME (LOSS) BEFORE
OTHER (EXPENSES) ....................................... 8,662 (7,120)
------------ ------------
OTHER INCOME AND (EXPENSES):
Interest Income ........................................ 150 18
Interest (Expense) ..................................... (509) (1,074)
------------ ------------
Total Other Income and
(Expenses) .......................................... (359) (1,056)
------------ ------------
Net Income (Loss) before
Provision for Income Taxes .......................... 8,303 (8,176)
Provision for Income Taxes ............................. 2,194 200
------------ ------------
NET INCOME (LOSS) ...................................... $ 6,109 $ (8,376)
============ ============
NET INCOME (LOSS) PER SHARE ............................ $ .001 $ (.001)
============ ============
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING .......... 10,000,900 10,000,000
============ ============
</TABLE>
* Adjusting for August 30, 1999 forward split, 8000-1 basis. The accompanying
notes are an integral part of the financial statements.
F-5
<PAGE>
<TABLE>
<CAPTION>
PROMOS, INC.
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
For the Years Ended December 31, 1999 and 1998
Common Total
Stock Additional (Deficit) Stockholders'
Number of Common Stock Paid-in Retained Equity
Shares Amount Capital Earnings (Deficit)
--------- ------------ ---------- ---------- -------------
<S> <C> <C> <C> <C> <C>
Balance
January, 1998 ......................... 1,250 $ 1,250 0 $ 264 $ 1,514
Net loss for
the year ended
December 31,
1998 .................................. 0 0 0 (8,376) $ (8,376)
---------- ---------- ---------- ---------- ----------
Balance
December 31, 1998 ..................... 1,250 $ 1,250 $ 0 $ (8,112) $ (6,862)
8,000 for 1,
forward split
on August 30,
1999 .................................. 9,998,750 8,750 (8,750) 0 0
October 1, 1999
shares issued
for cash, $1.00
per share less
deferred offering
costs ................................. 33,600 34 20,535 0 20,569
Net Income for
the year ended
December 31,
1999 .................................. 0 0 0 6,109 6,109
---------- ---------- ---------- ---------- ----------
Balance December
31, 1999 .............................. 10,033,600 $ 10,034 $ 11,785 $ (2,003) $ 19,816
========== ========== ========== ========== ==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-6
<PAGE>
<TABLE>
<CAPTION>
PROMOS, INC.
STATEMENTS OF CASH FLOWS
For the Years Ended December 31, 1999 and 1998
CASH FLOWS FROM OPERATING ACTIVITIES:
1999 1998
---- ----
<S> <C> <C>
Net Income (Loss) ............................... $ 6,109 $ (8,376)
Adjustments to Reconcile
Net (Loss) to Cash Flow From
Operating Activities:
Depreciation .................................... 320 320
Decrease (Increase) in
Accounts receivable ......................... 5,100 2,530
(Increase) in prepaid
Expenses .................................... (580) (100)
Increase (Decrease) in
Payables .................................... (4,922) (3,273)
Increase in Accrued
Expenses ..................................... (3,840) 3,450
Increase in Banks
Line of Credit ............................... 2,585 4,126
-------- --------
Cash Provided (Used)By
Operating Activities ............................ 4,772 (1,323)
-------- --------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Decrease in Stockholders'
Loan ........................................... (4,500) (2,000)
Issuance of common stock, net of
Offering costs of 12,031 ......................... 20,569 0
-------- --------
Net Cash Provided (Used) by
Financing Activities ........................ 16,069 (2,000)
-------- --------
CASH, BEGINNING OF PERIOD ............................ 746 4,069
-------- --------
CASH, END OF PERIOD .................................. $ 21,587 $ 746
======== ========
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-7
<PAGE>
PROMOS, INC.
NOTES TO FINANCIAL STATEMENTS
For the Years Ended December 31, 1999 and 1998
NOTE I - ORGANIZATION AND HISTORY
The Company is a Colorado corporation and has been incorporated since September
24, 1992. The business purpose of this corporation is to engage in the sale of
promotional products to other business companies.
NOTE II - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Method
The company record income and expenses on the accrual method.
Cash and Cash Equivalents
Cash and cash equivalents includes cash on hand, cash on deposit and highly
liquid investments with maturities generally of three months or less.
Sales and Expenses
Sales and expenses are recorded using the accrual basis of accounting.
Fixed Assets and Accumulated Depreciation
Fixed assets consists of office equipment and are stated at cost less
accumulated depreciation which is provided for by charges to operations over the
estimated useful lives of the assets. The assets are depreciated over five
years.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Offering Costs
Costs ($13,031) associated with the Company's private offerings have been
charged to the proceeds of the offering.
F-8
<PAGE>
NOTE III - AGING OF ACCOUNTS RECEIVABLE AND PAYABLE
The percentage aging of trade accounts receivable and accounts payable at
December 31, 1999 and 1998 is as follows:
Accounts Receivable Accounts Payable
Current 45% 100%
30-60 days 40%
over 60 days 15%
Bad Debt Policy
The Company uses the direct write-off method for its allowance for doubtful
accounts.
NOTE IV - LEASES AND OTHER COMMITMENTS
The Company leases its premises for $366.00 per month and currently has a two
year lease from March 1, 1999 through February 28, 2001.
NOTE V - RELATED PARTY TRANSACTIONS
The Company has incurred salary expenses of $15,500.00 and $15,000.00 for 1999
and 1998, respectively to its president. The Company also pays auto rental for
its president, this is currently $403.38 per month.
NOTE VI - LINE OF CREDIT
The Company has obtained a line of credit for $35,000.00. The interest rate
varies and is approximately 10.50 percent.
F-9
<PAGE>
Item 8. Disagreements With Accountants on Accounting and Financial Disclosure.
The Company did not have any disagreements on accounting and financial
disclosures with its present accounting firm during the reporting period.
PART III
Item 9. Directors, Executive Officers, Promoters, and Control Persons;
Compliance with Section 16(a) of the Exchange Act.
Our Directors and Executive Officers, their ages and positions held in the
Company as of December 31, 1999 are as follows:
NAME AGE POSITION HELD
---- --- -------------
Judith F. Harayda 51 President and Director
Stephan R. Levy 60 Secretary, Treasurer and Director
Our Directors will serve in such capacity until our next annual meeting of
shareholders and until their successors have been elected and qualified. The
officers serve at the discretion of our Directors. There are no family
relationships among our Officers and Directors, nor are there any arrangements
or understandings between any of our Directors or Officers or any other person
pursuant to which any officer or director was or is to be selected as an officer
or director.
Ms. Harayda should be considered the "parent" or "promoter" of our Company
because of the shareholdings and control positions held by her in us.
Judith F. Harayda . Ms. Harayda has been the President and a Director of
the Company since inception. She has also previously been President of United
Venture Capital Fund, Inc. and the Treasure of New World Publishing, Inc., both
of which were public companies at the time. Ms. Harayda received a Bachelors
Degree in Education from Edinboro University.
Stephan R. Levy. Mr. Levy has been Secretary-Treasurer and a Director of
the Company since inception. He has been retired since August, 1990. Prior to
that time, he was an officer and director of Tofruzen, Inc., a public company
which manufactured and marketed a non-dairy frozen dessert, novelty food
products, and promotional items. He has previously served as Secretary-Treasurer
of two public companies, Central Oil Corp. and United Venture Capital Fund, Inc.
He attended the University of Texas and graduated in 1961 from the University of
Colorado with a Bachelor of Science in Business. He is a member of the
International Monetary Market, which is a division of the Chicago Mercantile
Exchange and was appointed by the Governor of Colorado as a member of the
Colorado Municipal Bond Supervisory Board.
9
<PAGE>
Compliance with Section 16(a) of the Securities Exchange Act of 1934.
Section 16(a) of the Securities Exchange Act of 1934 (the "34 Act")
requires our officers and directors and persons owning more than ten percent of
the our Common Stock, to file initial reports of ownership and changes in
ownership with the Securities and Exchange Commission ("SEC"). Additionally,
Item 405 of Regulation S-B under the 34 Act requires us to identify in its Form
10- KSB and proxy statement those individuals for whom one of the above
referenced reports was not filed on a timely basis during the most recent fiscal
year or prior fiscal years. Given these requirements, we have the following
report to make under this section. None of our Officers or Directors made timely
filings of their Forms 3 and 5 in the last fiscal year. All such persons
eventually made the filings and have been advised concerning their
responsibilities regarding future compliance with these rules.
Item 10. Executive Compensation.
None of our executive officers received compensation in excess of $100,000
during the fiscal years ended December 31, 1997, 1998, or 1999. Compensation
does not include minor business-related and other expenses paid by us. Such
amounts in the aggregate do not exceed $10,000. Our President, Judith F.
Harayda, received compensation of $15,500, $15,000, and $17,340 for 1999, 1998,
and 1997, respectively. Ms. Harayda serves as our President on a full-time
basis.
We have granted no shares of our capital stock as additional compensation
and have no plans to do so.
For the fiscal years 1997, 1998, and1999, we paid our President's health
care. We have a Self Employment pension plan for the benefit of our President.
We have no plans or agreements which provide compensation on the event of
termination of employment or change in our control.
We do not pay members of our Board of Directors any fees for attendance or
similar remuneration, but reimburse them for any out-of- pocket expenses
incurred by them in connection with our business.
Item 11. Security Ownership of Certain Beneficial Owners and Management.
The following sets forth the number of shares of the Registrant's $.0.001
par value common stock beneficially owned by (i) each person who, as of December
31, 1999, was known by the Company to own beneficially more than five percent
(5%) of its common stock; (ii) the individual Directors of the Registrant and
(iii) the Officers and Directors of the Registrant as a group. These shares
reflect an 8,000- for-one forward split of the Common Stock.
Name and Address Amount and Nature of Percent of
of Beneficial Owner Beneficial Ownership(1)(2) Class
- ------------------- ------------------------- ----------
Judith F.Harayda(3) 8,000,000 80%
6000 E. Evans, Suite 2-020
Denver, Colorado 80222
Stephan R. Levy -0- -0-
2121 South Oneida, #332
Denver, Colorado 80224
All Officers and Directors as a Group 8,000,000 80%
(two persons)
10
<PAGE>
(1) All ownership is beneficial and on record, unless indicated otherwise.
(2) Beneficial owners listed above have sole voting and investment power with
respect to the shares shown, unless otherwise indicated.
Item 12. Certain Relationships and Related Transactions.
We paid our President, Judith F. Harayda, salary expenses of $15,000 during
fiscal year 1998. We also paid her auto rental, which is currently $403.38 per
month, and auto insurance.
On August 30, 1999, our shareholders approved an 8,000- for-one forward
split of the Common Stock. As of the date of this Registration Statement, we
have 10,033,600 shares of Common Stock issued and outstanding.
PART IV
Item 13. Exhibits and Reports on Form 8-K.
(a) The following financial information is filed as part of this
report:
(1) Financial Statements
(2) Schedules
(3) Exhibits. The following exhibits required by Item 601 to be
filed herewith are incorporated by reference to previously filed
documents:
Exhibit No. Description
---------- -----------
+3A Articles of Incorporation
+3B Amended and Restated Articles of Incorporation
+3C Bylaws
+ Previously Filed.
(b) Reports on Form 8-K. The Company filed no reports on Form 8-K
during the fourth quarter of the fiscal year ended December 31, 1999.
11
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
Promos, Inc.
Dated: 4/9/00 By: /s/ Judith F. Harayda
------------------------------
Judith F. Harayda
President
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
CHIEF FINANCIAL OFFICER
Dated: 4/9/00 By: /s/ Stephan R. Levy
------------------------------
Stephan R. Levy
Treasurer and Director
Dated: 4/9/00 By: /s/ Judith F. Harayda
------------------------------
Judith F. Harayda
Director
12
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
EXHIBITS
TO
Promos, Inc.
<PAGE>
INDEX TO EXHIBITS
Exhibit Page or
Number Description Cross Reference
- ------- ----------- ---------------
+3A Articles of Incorporation N/A
+3B Amended and Restated Articles of Incorporation N/A
+3C Bylaws N/A
+ Previously Filed.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 3-MOS
<FISCAL-YEAR-END> DEC-31-1999 DEC-31-1999
<PERIOD-START> JAN-01-1999 JAN-01-1998
<PERIOD-END> DEC-31-1999 DEC-31-1998
<CASH> 21,587 746
<SECURITIES> 0 0
<RECEIVABLES> 11,321 16,580
<ALLOWANCES> 0 (839)
<INVENTORY> 0 0
<CURRENT-ASSETS> 260 360
<PP&E> 1,600 1,600
<DEPRECIATION> (1,600) (1,280)
<TOTAL-ASSETS> 33,168 17,167
<CURRENT-LIABILITIES> 13,352 24,029
<BONDS> 0 0
0 0
0 0
<COMMON> 10,034 1,250
<OTHER-SE> 9,782 (8,112)
<TOTAL-LIABILITY-AND-EQUITY> 33,168 17,167
<SALES> 129,660 115,441
<TOTAL-REVENUES> 129,660 115,441
<CGS> 74,153<F1> 77,716
<TOTAL-COSTS> 74,153 77,716
<OTHER-EXPENSES> 46,845 44,845<F1>
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 359 1,056
<INCOME-PRETAX> 8,303 (8,176)
<INCOME-TAX> 2,194 200
<INCOME-CONTINUING> 0 0
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 6,109 (8,376)
<EPS-BASIC> .001 (.001)
<EPS-DILUTED> 0 0
<FN>
The accompanying notes are an integral part of the financial statements.
</FN>
</TABLE>
